RAK Ceramics 2015 profit jumps

15 February 2016

Net income rises amid challenging market conditions

RAK Ceramics, one of the world’s biggest ceramic tiles manufacturers, said its 2015 full-year net income rose 10.2 per cent despite challenging market conditions, depreciation of major currencies and increasing cost of natural gas prices in the UAE.

The Abu Dhabi-listed company’s net income rose to AED310m ($84.5m) at the end of last year, rising from AED281.7m in 2014, it said in a stock exchange filing.

The bottom-line was impacted due to AED38.7m loss on account of hyperinflation impact in Sudan and Iran markets. Total revenues for the year also declined to AED3.078bn, a 1.5 per cent slide from AED3.124bn reported in 

The last year has been “a year filled with challenges for the group,’’ RAK Ceramics said in the statement. “During the period, the company continued executing its re-focused strategy to scale down less profitable non-core businesses.’’

The company consolidated its position in key markets in 2015 buying non-controlling interests in Indian and Iranian units, making them wholly-owned companies. It completed sale of stake in its Sudan subsidiary and established independent operations in Singapore and Saudi Arabia.

In total, RAK Ceramics last year sold its stake in eight non-core business, including Laticrete RAK, Al-Hamra Aluminum & Glass Industries, RAK Gypsum & Decorations, RAK Logistics RAK Piling and its subsidiaries in the UAE. In Bangladesh, the company liquidated holdings in in RAK Pharmaceuticals, RAK Paints and RAK Mosfly units.

The net revenues from core business of ceramic tiles, Sanitaryware and tableware dropped to AED2.586bn from AED2.664m in 2014. Depreciation in euro, British pound and other major currencies against the US dollar had an adverse impact of AED94m on revenues. On cost side, the company recorded an increase AED37m over 2014 in the prices of natural gas in the UAE.

The total assets remained little changed at AED5.981.8bn, however, it’s debt at the end of 2015 rose 13.3 per cent to AED1.61bn, according to the statement.

 

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